The final chapter begins as Bastian has lost everything: his power, all of his memories of Earth, and his own name. All he wants now is to find the Water of Life, and go home, a goal that he had thrown away in favor of remaining in Fantastica and making more wishes. The image of his forgotten dream, the one that was to guide him to the MacGuffin, has been shattered. As he kneels in the snow, utterly defeated and hopeless, he sees Atreyu and Falkor, two Fantastican friends that he betrayed. He moves toward them and, without a word, divests himself of AURYN, the source of all his power in Fantastica and his only remaining tie to the world and his sanity. In that instant, AURYN glows brighter then the sun, and the three find themselves at the Water of Life's vaulted chamber. However, the Water cannot let in one who does not tell it their name, and Bastian has lost his. But Atreyu, the friend he betrayed and nearly killed, vouches for him, giving the MacGuffin Bastian's name and naming himself his friend.
After Bastian drinks of the Water, he wants to take some of the liquid joy back to his grieving father, and tries to go home through the other gate in the vault. But he cannot go through, because he has not completed the stories he started in Fantastica through his adventures. Bastian has lost his newfound strength, his memories, and has used his final wish. He has no way of finishing the countless stories he left in his wake, and he knows that he's doomed. As he sits on the brink of despair, his betrayed friend again vouches for him, promising that he will complete Bastian's stories, no matter how long it takes. Bastian is so moved by his friend's kindness that he bows himself down to the ground and weeps tears of joy, promising to never forget Atreyu and his kindness, as long as he lives.
Earlier in the story, Bastian discovers that only those who have drank from the Water of Life have the capacity to love, and only a few creatures in Fantastica/Fantasia have ever done so. This means that few Fantasticans truly love. However, when he invites Atreyu and Falkor into the Water of Life with him, they say something to the effect of "Not this time." When he asks about their wording, they reveal that, though they hadn't remembered until just now, each had been to (and implicitly had drank) the Water of Life in their sleep as a result of having worn AURYN. If the reader gives this some thought, the purpose of this is clearly to assure the reader that Atreyu and Falkor are truly capable of loving, and that their friendship with Bastian and each other was and is totally real and sincere.
Bastian's last words in Fantastica as he passes through the gate to his world, taking the Water to his father.
Bastian: Father! Father! I - am - Bastian - Balthazar - Bux!
And finally, as Bastian is reunited with his father, as he is telling his father the story that he is sure he could not believe, he believes that he failed his father, that he spilled the Water as he came through the gate, but the narration says otherwise.
It was almost dark in the kitchen. His father sat motionless. Bastian stood up and switched on the light. And then he saw something he had never seen before. He saw tears in his father's eyes. And he knew that he had brought him the Water of Life after all.
The conversation between Bastian and the antiquarian at the very end turns the nasty old bookseller into a sympathetic character.
The first film
As heartbreaking as it was, Atreyu desperately trying to save Artax is incredibly moving. "You have to try. You have to care. For me. You're my friend. I love you."
Falcor, the Reliable.
Falcor: Having a luck dragon with you is the only way to go on a quest.
The entire scene where they first meet is absolutely adorable. The ear scratching, the way Falcor cheers Atreyu up... all of it.
Atreyu:(smiles) It's good to have a friend again.
Also at the end, when Atreyu is depressed over the fact that he thinks he failed, and Falcor reassures him that he did the best he could.
"I will do what I dream!"
The fact that in the end, all of the horrible things done by the Nothing are undone; specifically that Artax is alive and reunited with Atreyu.
The second film
The end of the film, in which the protagonist has been unwittingly sacrificing his memories of his life on Earth in order to use godlike wishes. He is confronted by the Big Bad Xayide, the land is in ruins in spite of his wasted wishes, and he has only one memory left. What does he wish for?
Bastian:(looks at Xayide) I wish you had a heart. (Xayide suddenly stops in her tracks, the snide grin on her face falling into a realization of sincerely distraught shame, and a single tear rolls down her cheek. When it splashes on the ground, its ripples spread across Fantasia, undoing all her evil deeds.)
The part where he has only two memories left — his much-mourned mother and his grieving, impatient father — and he chooses to remember his father.
Bastian's father reads along on his son's adventure and encourages him.